United States v. JOHN ARTHUR HANRATTY, Southern District of New York (Dec. 18, 2023) — Complaint

AUSAs: Andrew K. Chan and Nicholas Chiuchiolo 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
UNITED STATES OF AMERICA 
v. 
JOHN ARTHUR HANRATTY, 
Defendant. 
      SEALED COMPLAINT 
      Violations of 18 U.S.C. §§ 1343, 1344 
      COUNTY OF OFFENSE: 
      NEW YORK 
SOUTHERN DISTRICT OF NEW YORK, ss.: 
LAUREN COLLINS, being duly sworn, deposes and says that she is a Special Agent with 
the Federal Bureau of Investigation (“FBI”), and charges as follows: 
COUNT ONE 
(Wire Fraud) 
1.From at least in or about 2017 through at least in or about 2021, in the Southern
District of New York and elsewhere, JOHN ARTHUR HANRATTY, the defendant, knowingly 
having devised and intending to devise a scheme and artifice to defraud, and for obtaining money 
and property by means of false and fraudulent pretenses, representations, and promises, transmitted 
and caused to be transmitted by means of wire, radio, and television communication in interstate 
and foreign commerce, writings, signs, signals, pictures, and sounds, for the purpose of executing 
such scheme and artifice, which affected a financial institution, to wit, HANRATTY engaged in 
scheme  to  make  false  statements  to a  bank (“Victim Bank-1”) insured  by  the  Federal  Deposit 
Insurance Corporation (the “FDIC”) in order to fraudulently obtain money from HANRATTY’s 
line of credit with Victim Bank-1, and sent and received, and caused others to send and receive, 
emails and other electronic communications, to and from the Southern District of New York and 
elsewhere, in furtherance of that scheme. 
(Title 18, United States Code, Sections 1343 and 2.) 
COUNT TWO 
(Bank Fraud) 
2.From at least in or about 2017 through at least in or about 2021, in the Southern
District of New York and elsewhere, JOHN ARTHUR HANRATTY, the defendant, knowingly 
executed, and attempted to execute, a scheme and artifice to defraud a financial institution, as that 
term is defined in Title 18, United States Code, Section 20, and to obtain moneys, funds, credits, 
assets,  securities,  and  other  property  owned  by,  and  under  the  custody  and  control  of,  such  a 
financial institution, by means of false and fraudulent pretenses, representations, and promises, to 
23 MAG 7566

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wit, HANRATTY engaged in scheme to make false statements to Victim Bank-1 in order to obtain 
money from HANRATTY’s line of credit with Victim Bank-1. 
(Title 18, United States Code, Sections 1344 and 2.) 
The bases for my knowledge and for the foregoing charges are, in part, as follows: 
3.I  am  a  Special  Agent  with the  FBI  and  am  currently  assigned  to  a  squad  that
primarily  investigates  securities  fraud  and  other  complex  white-collar  frauds.    I  have  received 
training  and  have  participated  in  investigations  of  financial  crimes,  including  crimes  involving 
financial  institutions.    I  am  familiar  with  the  facts  and  circumstances  set  forth  below  from  my 
personal  participation  in  the  investigation, including  my  examination  of  reports  and  records, 
interviews  I  have  conducted,  and  conversations  with  other  law  enforcement  officers  and  other 
individuals.    Because  this  affidavit  is  being  submitted  for  the  limited  purpose  of  establishing 
probable  cause,  it  does  not  include  all  the  facts  that  I  have  learned  during  the  course  of  my 
investigation.  Where the contents of documents and the actions, statements and conversations of 
others are reported herein, they are reported in substance and in part, unless noted otherwise. 
OVERVIEW 
4.As detailed below, JOHN ARTHUR HANRATTY, the defendant, was the Founder
and Managing Director of Ebury Street Capital, LLC (“Ebury Street Capital”), an investment firm 
with a portfolio primarily comprised of municipal tax liens.  Between in or around 2017 and in or 
around 2021, HANRATTY participated in a fraudulent scheme to steal money from Victim Bank-
1 by  drawing  down  on approximately $20  million in commercial  lines of  credit  that  had  been 
extended  to  Ebury  Street  Capital.   Specifically, as  further  detailed  below, HANRATTY  made 
materially false statements on spreadsheets (known as “borrowing base certificates”) submitted by 
email to Victim Bank-1 summarizing the value of the municipal tax liens that Ebury Street Capital 
was offering as collateral for its commercial line of credit.  As a result of these false statements on 
Ebury Street Capital’s borrowing base certificates, Victim Bank-1 paid Ebury Street Capital large 
sums  of  money  to  which  it  was  not  entitled.    The  false  statements on Ebury Street Capital’s 
borrowing base certificates included, among other things: (1) listing large quantities of municipal 
tax liens on the borrowing base certificates that Ebury Street Capital did not own; and (2) double-
counting  municipal  tax  liens  by  listing  the  same  liens  on  multiple  borrowing  base  certificates.  
Additionally, although Ebury Street Capital was contractually required to use money from Victim 
Bank-1 either to  purchase  municipal  tax  liens or  for  ordinary  business  expenses,  HANRATTY 
actually used portions of the money obtained from Victim Bank-1 to pay off Ebury Street Capital’s 
investors—who  themselves  were  threatening  to sue  and who, in  fact, sued  Ebury  Street  Capital 
and HANRATTY after Ebury Street Capital was unable to pay investors who were seeking to pull 
out  their  investments  from  the  fund.  Ebury Street Capital’s commercial line of credit has now 
been  completely  exhausted,  and  Ebury  Street  Capital owes  over  $20 million in  principal  and 
interest to Victim Bank-1. 
BACKGROUND ON EBURY STREET CAPITAL 
5.Based  on  my  training  and  experience,  my  conversations  with  representatives  of
Victim Bank-1, my review of publicly available information regarding Ebury Street Capital, and 

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my personal involvement in this investigation, I have learned the following, in substance and in 
part, regarding Ebury Street Capital and its commercial line of credit with Victim Bank-1: 
 
a. Ebury Street Capital is an investment firm that was founded by JOHN ARTHUR 
HANRATTY, the defendant, in or around 2010.  At all relevant times, HANRATTY served as the 
Managing  Director  and  Principal  for  Ebury  Street  Capital,  which  manages  two  different  funds 
known as Ebury Fund 1 and Ebury Fund 2.  HANRATTY has been an attorney licensed to practice 
law in the State of New York since in or around 2002 and has previously held legal and compliance 
positions at well-known investment firms and financial institutions, including serving as the Chief 
Compliance  Officer  and  General  Counsel  for  a  trading  broker  dealer.  HANRATTY  resided  in 
Rye, New York until in or around 2019, when he relocated to San Juan, Puerto Rico.  
 
b. Ebury Street Capital primarily invests in municipal tax liens, which are liens placed 
on real property by municipal governments for delinquent property taxes and other fees owed by 
property  owners.  Municipal  governments  typically  sell  municipal  tax  lien  certificates  to  the 
highest bidder at public auctions.  Investors frequently purchase tax lien certificates because: (1) 
municipal tax liens earn a high rate of interest (frequently between 10% to 36% annually) until the 
underlying taxes are repaid (and the lien is “redeemed”) by the property owner; and (2) municipal 
tax  liens  frequently  provide  a  path  for  investors  to  foreclose  on  the  underlying  property  and 
potentially gain ownership of the underlying real estate.  Within the municipal tax lien investment 
industry, municipal tax liens are typically valued by: (a) the amount of outstanding taxes or fees 
owed to the municipality (known as the “face value”); (b) the amount of taxes and fees owed plus 
all accrued interest required to redeem a property and satisfy the lien (known as the “redemptive 
value”); or (c) the fair market value of the underlying real estate. 
 
c. Victim Bank-1 is headquartered in Manhattan and operates a commercial lending 
business through which it provides loans to various businesses, including investment firms.  In or 
around 2016, HANRATTY approached Victim Bank-1 to apply for a commercial line of credit for 
Ebury  Street  Capital.    HANRATTY  represented  to  representatives  of  Victim  Bank-1  that  the 
purpose of Ebury Street Capital’s commercial line of credit would be for HANRATTY to invest 
in municipal tax liens earning a high rate of interest—an interest rate that would exceed the interest 
charged  by  Victim  Bank-1  on  the  line  of  credit.    HANRATTY  claimed  to  have  significant 
experience in purchasing municipal tax liens and to have been investing in tax liens since 2009. 
 
d. In  or  around  March  2017, Victim  Bank-1  agreed  to  extend  a  $10  million 
commercial  line  of  credit  to  Ebury  Fund  1  and  a  $5  million  commercial  line  of  credit  to  Ebury 
Fund 2.  In or around October 2018, Victim Bank-1 agreed to expand these commercial lines of 
credit  by  an  additional  $3.5 million.  In  or  around  September  2019,  Victim  Bank-1  agreed  to 
expand these commercial lines of credit by an additional $1.5 million, for a total of $20 million.  
To memorialize these commercial lines of credit, HANRATTY signed credit agreements on behalf 
of Ebury Fund 1 and Ebury Fund 2.  The credit agreements restricted Ebury Street Capital’s use 
of the funds from the line of credit to the purchase of tax liens and ordinary and necessary business 
expenses.  Prior to obtaining any money from Victim Bank-1, Ebury Street Capital was required 
to  submit  a  spreadsheet  known  as  a  “borrowing  base  certificate”  that  summarized  the 
unencumbered municipal tax liens being offered as collateral for the line of credit.  The borrowing 
bases  used  a  formula allowing Ebury  Street  Capital  to  borrow  a  certain  percentage  (typically 
between 80% to 90%, depending on the municipality) of the redemptive value of the municipal 
tax lien.  So, for example, if Ebury Street Capital placed new municipal tax liens into a borrowing 

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base certificate, their potential borrowing ability increased.  Similarly, if batches of municipal tax 
liens were redeemed or sold, then Ebury Street Capital’s borrowing base decreased.  Because of 
the   importance   of   the   accuracy   and   truthfulness   of these   borrowing   base   spreadsheets, 
HANRATTY was required to sign each borrowing base certificate and certify as to its accuracy. 
 
e. The total loan balance on Ebury Fund 1’s and Ebury Fund 2’s lines of credit with 
Victim Bank-1 generally hovered below approximately $5 million until in or around the Summer 
of 2018, when Ebury Street Capital began to borrow heavily from the lines of credit with Victim 
Bank-1.  By in or around September 2018, Ebury Street Capital had borrowed approximately $15 
million  from  its  lines  of  credit,  and  by  in  or  around  December  2019,  Ebury  Street  Capital  had 
nearly exhausted the $20 million available through its lines of credit with Victim Bank-1. 
 
f. In or around March 2021, Ebury Street Capital failed to pay off its outstanding loan 
to Victim Bank-1 by the original maturity date, which was then extended several additional times 
until in or around November 2021, by which time Ebury Street Capital owed over $18 million in 
outstanding  principal  and  interest.    Since  in  or  around  October  2021,  Ebury  Street  Capital  has 
failed to make any principal or interest payments to Victim Bank-1. 
 
FALSE STATEMENTS IN EBURY STREET CAPITAL’S  
BORROWING BASE CERTIFICATES 
 
6. As  further  discussed  below,  the  FBI  has  identified  numerous  false  statements  in 
Ebury  Street  Capital’s  borrowing  base  certificates  that  were  submitted  by  JOHN  ARTHUR 
HANRATTY, the defendant, to Victim Bank-1 to obtain additional funds to which Ebury Street 
Capital was not entitled.  These false statements include (1) listing large quantities of municipal 
tax  liens  on  borrowing  base  certificates  that  Ebury  Street  Capital  did  not  actually  own;  and  (2) 
double-counting  municipal  tax  liens  by  listing  the  same  liens  on  multiple  borrowing  base 
certificates.  Some examples of these false statements are described below. 
 
7. Based  on  my  review  of  records  from  Victim  Bank-1, my  conversations  with 
representatives of Victim Bank-1, my conversations with the CEO and owner of a brokerage firm 
for municipal tax liens that did business with Ebury Street Capital (“Broker-1”),
1
 and my review 
of bank records, records obtained from Broker-1, and other records obtained during the course of 
the investigation, I have learned the following, in substance and in part: 
 
Ebury Fund 2 - October 15, 2018 Borrowing Base Certificate and  
January 9, 2020 Borrowing Base Certificate 
 
a. On or about October 15, 2018, an Ebury Street Capital employee located outside of 
the United States submitted by email to Victim Bank-1, located in Manhattan, a borrowing base 
certificate signed by JOHN ARTHUR HANRATTY, the defendant, containing a spreadsheet titled 
“NJ Additions” with  a  purported  value  of  approximately  $85,000.  The  spreadsheet contained 
 
1
 Based on my review of publicly available court records, I know that in or around February 
2021, Ebury Street Capital filed a lawsuit against Broker-1 in the United States District Court for 
the District of Delaware alleging, among other things, violations of the racketeering laws, 
fraudulent inducement to contract, breach of contract, and unjust enrichment.  Broker-1 has filed 
counterclaims in the litigation alleging similar claims against Ebury Street Capital. 

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information regarding approximately 44 tax liens from various municipalities in New Jersey.  The 
“NJ  Additions”  sheet  in  the  borrowing  base  certificate  contains  the name  of  Broker-1  and 
contained  information  typically  held  by  Broker-1  for  each  of  the  liens,  including  a  unique 
identification number for each lien used by Broker-1.  Based on my conversations with the CEO 
of Broker-1, HANRATTY inquired with Broker-1 about purchasing the book of liens described in 
the “NJ Additions” spreadsheet on behalf of Ebury Street Capital, but the transaction did not occur.  
Based on this information from Broker-1 and my review of Ebury Street Capital’s bank records 
and internal accounting records, I believe that HANRATTY falsely represented to Victim Bank-1 
that Ebury Street Capital owned the tax liens in the “NJ Additions” spreadsheet and offered the 
liens as collateral. 
 
b. As a result of the inclusion of the “NJ Additions” spreadsheet in the borrowing base 
certificate, HANRATTY  falsely  certified to  Victim  Bank-1  that the value of Ebury Fund 2’s 
collateral was approximately $4.65 million.  Based on this collateral valuation and the previous 
loan  balance  of  approximately  $4.56  million, HANRATTY  falsely  certified  that Ebury  Street 
Capital was entitled to borrow an additional $85,500 from Ebury Fund 2’s line of credit. 
 
c. Based on my review of bank records, I know that on or about October 15, 2018, 
Victim  Bank-1  transferred approximately  $75,000  to  Ebury  Fund  2  in reliance  on the false 
borrowing base certificate.  The money was then transferred from Ebury Fund 2 to Ebury Fund 1, 
shortly after Ebury Fund 1 had disbursed on or about October 11, 2018 approximately $340,000 
to two individuals that, based on the names of the individuals and publicly available information, 
appear to be investors in Ebury Street Capital. 
 
d. On or about January 9, 2020, Ebury Street Capital submitted to Victim Bank-1 a 
borrowing base certificate signed by HANRATTY containing a spreadsheet titled “NJ Additions” 
that  contained  approximately  44  tax  liens  from  various  municipalities  in  New  Jersey.  The “NJ 
Additions” spreadsheet  in  the  borrowing  base  certificate  contains  the  name  of  Broker-1  and 
appears to be nearly identical in all material respects to the “NJ Additions” spreadsheet  in  the 
October 15, 2018 borrowing base certificate.  In connection with the submission of this borrowing 
base certificate, HANRATTY wrote in the subject line of the email sent to Victim Bank-1: “Fund 
2 – we  bought  some  subs.”    Based  on  my  training,  experience,  and  participation  in  this 
investigation,  I believe that “subs” frequently refer to subsequent tax liens that are placed on a 
particular  property  for  additional  years  where  taxes  are  owed  by  a  property  owner  to  a 
municipality.    As  a  result,  in  this  borrowing  base  certificate, I  believe  that HANRATTY  was 
representing that Ebury Fund 2 had purchased tax liens for additional years on the same liens that 
were listed in the “NJ Additions” sheet in the October 15, 2018 borrowing base certificate—a 
batch of tax liens and subsequent tax liens that Ebury Street Capital did not actually own. 
 
e. As a result of the inclusion of the “NJ Additions” spreadsheet in the January 9, 2020 
borrowing base certificate, HANRATTY falsely certified to Victim Bank-1 that the value of Ebury 
Fund 2’s collateral was approximately $4.85 million.  Based on this collateral valuation and the 
previous loan balance of approximately $4.73 million, HANRATTY falsely certified that Ebury 
Street Capital was entitled to borrow an additional approximately $132,000 from Ebury Fund 2’s 
line of credit. 
 
f. Based on my review of  bank records,  I know that on or  about January 10, 2020, 
Victim  Bank-1  transferred approximately  $125,000  to  Ebury  Fund  2 in  reliance  on  the  false 

6 
borrowing base certificate. Those funds, in turn, were distributed to various Ebury bank accounts, 
including  $10,000  that  was  quickly  transferred  through  multiple  Ebury  accounts  and  then  to 
HANRATTY’s American Express account.   
Ebury Fund 1 – November 9, 2018 Borrowing Base Certificate and 
February 8, 2019 Borrowing Base Certificate 
g.On or about November 9, 2018, Ebury Street Capital submitted by email to Victim
Bank-1 a borrowing base certificate signed by HANRATTY containing a spreadsheet titled “FL 
Additions” that contained approximately 60 tax liens from various municipalities in Florida.  The 
“FL Additions” spreadsheet in the borrowing base certificate did not contain the name of Broker-
1,  but  contained  information  typically  held  by  Broker-1  for  each  of  the  liens,  including,  for 
example, a  unique  identification  number  for  each  lien used  by  Broker-1.    Based  on  my 
conversations  with  the  CEO  of  Broker-1,  HANRATTY  inquired  about  purchasing  the  book  of 
liens described in the “FL Additions” spreadsheet on behalf of Ebury Street Capital in or around 
October 2018, but the transaction did not occur.  
h.Based  on  my  personal  involvement  in  this  investigation,  I  know  that an external
contractor was hired to conduct an analysis on a random sample of approximately 15 percent of 
the 60 tax liens listed in the “FL Additions” spreadsheet.  Based on this analysis of the publicly-
available records for these randomly-selected tax liens, it did not appear that Ebury Street Capital 
ever became the registered owner of the tax liens in the “FL Additions” spreadsheet. 
i.As a result of the inclusion of the “FL Additions” spreadsheet in the November 9,
2018 borrowing base certificate, HANRATTY falsely certified to Victim Bank-1 that the value of 
Ebury Fund 1’s collateral was approximately $9.55 million.  Based on this collateral valuation and 
the  previous  loan  balance  of  approximately  $9.33  million,  HANRATTY  falsely  certified  that 
Ebury  Street  Capital  was  entitled  to  borrow  an  additional approximately $220,000  from Ebury 
Fund 1’s line of credit. 
j.Based on my review of bank records, I know that on or about November 9, 2018,
Victim  Bank-1  transferred approximately  $220,000  to  Ebury  Fund 1 in reliance  on the false 
borrowing base certificate.  Later that day, Ebury Fund 1 disbursed approximately $288,000 to an 
individual   who,   according   to   Victim   Bank-1 and   publicly   available   information,   was   a 
representative of an investor in Ebury Street Capital. 
k.Approximately  three  months  later,  on  or  about  February  8,  2019,  Ebury  Street
Capital submitted by email to Victim Bank-1 a borrowing base certificate signed by HANRATTY 
attaching a spreadsheet titled “FL Additions,” which  appeared to  be  identical  in  all  material 
respects to the false “FL Additions” spreadsheet included in the November 9, 2018 borrowing base 
certificate  described  above  in  paragraph  7(g).    In  other  words,  HANRATTY  on  two  separate 
occasions fraudulently offered the same batch of tax liens as collateral to Victim Bank-1.  Based 
on my conversations with the CEO of Broker-1, the analysis by the external contractor described 
above, and my review of Ebury Street Capital’s bank records and internal accounting records, I 
believe that HANRATTY falsely represented to Victim Bank-1 that Ebury Street Capital owned 
the batch of liens listed in the “FL Additions” spreadsheet at the time when they were listed in the 
November 9, 2018 and February 8, 2019 borrowing base certificates. 

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l. As a result of the inclusion of the “FL Additions” spreadsheet in the February 8, 
2019 borrowing base certificate, HANRATTY falsely certified to Victim Bank-1 that the value of 
Ebury Fund 1’s collateral was approximately $9 million.  Based on this collateral valuation and 
the  previous  loan  balance  of  approximately  $8.52  million,  HANRATTY  falsely  certified  that 
Ebury Street Capital was entitled to borrow an additional $482,000 from Ebury Fund 1’s line of 
credit. 
 
m. Based on my review of  bank records,  I know that on or  about  February 8, 2019, 
Victim  Bank-1  transferred approximately  $460,000  to  Ebury  Fund  1 in  reliance  on the false 
borrowing base certificate. 
 
Ebury Fund 1 – March 21, 2019 Borrowing Base Certificate and  
May 17, 2019 Borrowing Base Certificate 
 
n. On  or  about  March  21, 2019,  Ebury  Street  Capital  submitted by  email to  Victim 
Bank-1 a borrowing base certificate signed by HANRATTY containing a spreadsheet titled “NJ 
Additions #2” that contained approximately 385 tax liens from  various  municipalities  in New 
Jersey.  As a result of the inclusion of this sheet, HANRATTY falsely certified to Victim Bank-1 
that there was approximately $2.1 million of available money to be borrowed under Ebury Fund 
1’s line of credit.   Based on my review of bank records, I know that on or about March 22, 2019, 
Victim Bank-1 transferred approximately $1.675 million to Ebury Fund 1 on or about March 22, 
2019. 
 
o. On  or  about  May  17,  2019,  Ebury  Street  Capital  submitted by  email to  Victim 
Bank-1 a borrowing base certificate signed by HANRATTY containing a spreadsheet titled “NJ 
Additions #3” that contained approximately 344 tax liens from various municipalities in New 
Jersey.  As a result of the inclusion of this sheet, HANRATTY falsely certified to Victim Bank-1 
that there was approximately $860,000 of available money to be borrowed under Ebury Fund 1’s 
line of credit.  Based on my review of bank records, I know that on or about May 17, 2019: (1) 
approximately $860,000 was transferred from Victim Bank-1 to Ebury Fund 1; (2) approximately 
$350,000 was transferred from Ebury Fund 2 to Ebury Fund 1; and (3) approximately $1.2 million 
was  transferred  from  Ebury  Fund  1  to a  business  entity  that,  based  on  publicly  available 
information and according to Victim Bank-1, was an investor in Ebury Street Capital.  Based on 
my review of Ebury Street Capital’s internal accounting records, I  know  that the  $1.2  million 
payment was described in Ebury Street Capital’s records as a “Settlement with the investor.”  
 
p. Based on my comparison of the “NJ Additions #2” spreadsheet in the March 21, 
2019 borrowing base certificate and the “NJ Additions #3” spreadsheet in the May 17, 2019 
borrowing base certificate, it appears that  approximately 70 percent of  the liens in the  “NJ 
Additions #2” spreadsheet reappeared on the “NJ Additions #3” spreadsheet.  In other words, it 
appears that HANRATTY fraudulently obtained money from Victim Bank-1 by double-counting 
over 200 municipal tax liens. 
 
MISAPPROPRIATION OF FUNDS FROM VICTIM BANK-1 TO PAY INVESTORS 
 
8. Based on my review of publicly available court records, I know that in or around 
January 2019, Ebury Street Capital was sued by a group of investors (the “Plaintiff Investors”) in 
Westchester County Supreme Court, who alleged, in substance and in part, that in or around June 

8 
2018,  the Plaintiff Investors  notified  Ebury  Street  Capital  of  their  intent  to  withdraw  their 
investments in the company.  However, as of the time the lawsuit was filed, Ebury Street Capital 
had not been able to pay the Plaintiff Investors.  See Brinker-Cohen Family Trust et al. v. Ebury 
Fund  I,  LP  et  al.,  No.  50611/2019  (Sup.  Ct.  Westchester  Cnty. Jan.  9.  2019).   Based  on my 
conversations with a representative of Victim Bank-1, I know that JOHN ARTHUR HANRATTY, 
the defendant, did not inform Victim Bank-1 of this lawsuit, in violation of the credit agreements 
signed by HANRATTY.  As further described below, on various dates that Ebury Street Capital 
submitted borrowing base certificates requesting funds from Victim Bank-1 to purchase municipal 
tax liens, it appears that Ebury Street Capital instead used the funds to pay investor distributions—
in  violation  of  the credit  agreements  signed  by  JOHN  ARTHUR  HANRATTY,  the  defendant.  
Based on my review of bank records, Ebury Street Capital’s accounting records, and records from 
Victim Bank-1, I have learned the following, among other things: 
a.On or about November 9, 2018, Ebury Street Capital submitted by email to Victim
Bank-1  a  borrowing  base  certificate  signed  by  HANRATTY,  which  resulted  in  Victim  Bank-1 
providing approximately $220,000 to Ebury Fund 1 for the purpose of purchasing municipal tax 
liens and ordinary business expenses.  Ebury Street Capital’s accounting records do not record any 
purchases of liens on or about that day; however, the records indicate a transfer of approximately 
$280,000 as an “Investor withdrew.”  The records additionally indicate the name of an attorney 
who  serves  as  a  representative  for  one  of  the  Plaintiff Investors.   As  a  result,  it  appears  that 
HANRATTY  misappropriated  funds provided  by  Victim  Bank-1  to  pay  one  of  the Plaintiff 
Investors. 
b.On  or  about  May  17,  2019,  Ebury  Street  Capital submitted by  email to  Victim
Bank-1  a  borrowing  base  certificate  signed  by  HANRATTY,  which  resulted  in  Victim  Bank-1 
providing approximately $860,000 to Ebury Fund 1 for the purpose of purchasing municipal tax 
liens,  as  described  above  in  ¶  7(o).    Ebury  Street Capital’s internal accounting  records  do  not 
include  records  of any  purchases  of  liens  on  or  about  that  day;  however,  the  records  indicate  a 
transfer of approximately $1.2 million as a “Settlement with the investor.”  Based on my review 
of bank records, it appears that this transfer was sent to one of the Plaintiff Investors. 
c.On or about September 13, 2019, Ebury Street Capital submitted by email to Victim
Bank-1  a  borrowing  base  certificate  signed  by  HANRATTY,  which  resulted  in  Victim  Bank-1 
providing approximately $850,000 to Ebury Fund 2 for the purpose of purchasing municipal tax 
liens.  Ebury Street Capital’s accounting records do not record any purchases of liens on or about 
that  day;  however,  the  records  indicate  two  transfers  totaling  approximately  $750,000  to  two 
individuals (“Investor-1” and “Investor-2”).  Based on my conversations with Investor-1, I know 
that  Investor-1  had  been  seeking  to  withdraw  Investor-1’s investments in Ebury Street Capital 
around the time of this transfer. 
9.Based on my conversations with representatives of Victim Bank-1, Ebury Street
Capital and JOHN ARTHUR HANRATTY, the defendant, have not made any principal or 
interest payments on its commercial lines of credit since in or around October 2021.  Ebury 
Street Capital currently owes Victim Bank-1 over $20 million in outstanding principal and 
interest. 

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WHEREFORE,  I  respectfully  request  that  a  warrant  be  issued  for  the  arrest  of JOHN 
ARTHUR HANRATTY, the defendant, and that he be arrested, and imprisoned or bailed, as the 
case may be. 
______________________________ 
Lauren Collins 
Special Agent 
Federal Bureau of Investigation 
Sworn to me through the transmission of 
this Complaint by reliable electronic  
means (telephone), this 14th day of December, 2023. 
___________________________________ 
THE HONORABLE ONA T. WANG 
United States Magistrate Judge 
Southern District of New York 
s/ Lauren Collins /otw
15th

DAMIAN WILLIAMS  
United States Attorney 
Southern District of New York 
By:  PIERRE G. ARMAND 
Assistant United States Attorney 
86 Chambers Street, 3rd Floor 
New York, New York 10007 
Telephone: (212) 637-2724 
Email: [email protected]  
 
UNITED STATES DISTRICT COURT  
SOUTHERN DISTRICT OF NEW YORK 

 
 
 
 
 
 

18 Civ. 9160 (VEC) 
 
 
 
COMPLAINT-IN-
INTERVENTION OF THE 
UNITED STATES OF 
AMERICA 
 
 
JURY TRIAL DEMANDED 

 

 
 

The United States of America, by its attorney, Damian Williams, United States 

Attorney for the Southern District of New York, alleges for its complaint-in-intervention as 

follows: 

UNITED STATES OF AMERICA ex rel. CABOT SQUARE 
LLC, 
 

Plaintiff, 
 

v. 
 
FULCRUM CAPITAL HOLDINGS LLC, MATTHEW 
HAMILTON, TIMOTHY HORRIGAN, FONDACO 
SGR S.P.A., COMPAGNIA DI SAN PAOLO, and 
CARAC, 

                                     Defendants. 

UNITED STATES OF AMERICA, 
 

Plaintiff-Intervenor, 
 
                              v. 
 
FULCRUM CAPITAL HOLDINGS LLC, 

 
 Defendant. 



 

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PRELIMINARY STATEMENT 

1. This is a civil fraud action brought by plaintiff-intervenor the United States of 

America (the “United States” or the “Government”) against defendant Fulcrum Capital 

Holdings LLC (“Fulcrum” or “Defendant”), an investment firm based in Austin, Texas, to 

recover damages and civil penalties arising from Fulcrum’s violations of the False Claims 

Act (the “FCA”), 31 U.S.C. § 3729 et seq., in connection with fraudulently obtaining 

remission payments from the Madoff Victim Fund (the “MVF”). 

2. The MVF was created by the United States Department of Justice (“DOJ” or the 

“Department”) to compensate victims of the massive Ponzi scheme perpetrated by Bernard 

L. Madoff through a process called remission.  The United States Attorney’s Office for the 

Southern District of New York (the “SDNY”) has provided funds to the MVF through civil 

and criminal asset forfeiture recoveries for pro rata distribution to Madoff fraud victims.  

To ensure equitable distribution of MVF funds, all claimants are required to disclose to the 

MVF any Madoff-related collateral recoveries they have obtained, meaning any monies 

received from sources other than the MVF, such as insurance, private lawsuits or 

settlements, the court-supervised liquidation of Madoff’s firm, or proceeds from selling 

their Madoff-related investments and/or recovery rights to another party.  To prevent MVF 

claimants from receiving duplicative recoveries, the MVF is required to reduce remission 

payments paid to claimants by the amount of any collateral recoveries they received. 

3. Fulcrum purchased from multiple third parties who had submitted remission claims 

to the MVF their shares in Madoff feeder funds,  as well as the claimants’ rights to receive 

remission payments from the MVF.  Because claims for remission cannot legally be 

assigned, these victims outwardly retained their status as MVF claimants, but privately 

agreed to promptly pass on any distributions they received from the MVF to Fulcrum. 



 

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4. When the MVF sent notices to the claimants requiring them to disclose, under 

penalty of perjury, any collateral recoveries they had received, Fulcrum directed the 

claimants to submit false collateral recovery update documentation to the MVF concealing 

the vast majority of the amounts that Fulcrum had previously paid them for the Madoff 

feeder fund shares and attendant rights and remission claims.  As a result of this deception, 

the MVF paid the claimants larger recoveries than they should have received.  The 

claimants then passed most of these amounts on to Fulcrum.   

5. As a result of the foregoing conduct, Fulcrum violated the FCA, and submitted or 

caused to be submitted false claims for payment to the MVF. 

JURISDICTION AND VENUE 

6. This Court has subject matter jurisdiction over the Government’s claims under the 

FCA pursuant to 31 U.S.C. § 3730(a) and 28 U.S.C §§ 1331 and 1345.  

7. This Court may exercise personal jurisdiction over Fulcrum pursuant to  

31 U.S.C. § 3732(a), which provides for nationwide service of process.  Further, because 

Fulcrum transacts business in this District and, in furtherance of the fraud alleged, caused 

false claims or statements to be submitted to the MVF in this District, venue is proper in 

this District pursuant to 31 U.S.C. § 3732(a) as well as 28 U.S.C. §§ 1391(b) and 1391(c). 

PARTIES 

8. Plaintiff is the United States of America.  Through DOJ, the United States 

administers the MVF.   

9. Defendant Fulcrum, a Delaware limited liability company, is an investment firm  

with its principal place of business in Austin, Texas. 

BACKGROUND 

A.  The False Claims Act 



 

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10. The False Claims Act was originally enacted in 1863 to address fraud on the 

Government in the midst of the Civil War, and it reflects Congress’s objective to “enhance 

the Government’s ability to recover losses sustained as a result of fraud against the 

Government.” See S. Rep. No. 99-345, at 1 (1986), reprinted in 1986 U.S.C.C.A.N. 5266.  

11. As relevant here, the FCA establishes treble damages liability to the Government 

where an individual or entity:  

(A) “knowingly presents, or causes to be presented, a false or fraudulent claim for 
payment or approval,” 31 U.S.C. § 3729(a)(1)(A); or 

(B) “knowingly makes, uses, or causes to be made or used, a false record or statement 
material to a false or fraudulent claim, id. § 3729(a)(1)(B). 

In addition to treble damages, the FCA also provides for assessment of a civil 

penalty for each violation or each false claim.  “Knowing,” within the meaning of the FCA, 

is defined to include a defendant acting in reckless disregard or deliberate indifference of 

the truth or falsity of information, as well as actual knowledge of such falsity by defendant.  

See id. § 3729(b)(1).  

B.  The Madoff Fraud, the Madoff Victim Fund, and the Remission Process 

13. From as early as the 1970s through December 2008, Bernard L. Madoff perpetrated 

the largest Ponzi scheme in history, defrauding thousands of direct and indirect investors in 

Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) of billions of dollars 

(the  “Madoff Fraud”).  In March 2009, Madoff pleaded guilty to eleven federal felonies, 

including securities, mail, and wire fraud, and in June 2009, Madoff was sentenced to serve 

150 years in prison and forfeit over $170 billion.    

14. The SDNY has recovered over $9 billion related to the Madoff Fraud through civil 

and criminal asset forfeiture proceedings.  



 

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15. In 2013, DOJ created the MVF to distribute certain funds forfeited to the United 

States related to the Madoff Fraud to victims pursuant to DOJ remission regulations, 28 

C.F.R §§ 9.1-9.9 (the  “Regulations”), and appointed Richard Breeden as special master to 

oversee the MVF and assist DOJ in connection with remission proceedings for victims of 

the Madoff Fraud.    

16. From November 2013 through April 2014, the MVF received remission claims 

from tens of thousands of victims of the Madoff Fraud, and in November 2017, the MVF 

began making distributions to victims whose claims were approved by DOJ.  To date, the 

MVF has made eight distributions to more than 40,000 approved claimants.  

17. The MVF remission process is governed by the Regulations and the Plan of 

Distribution for the MVF approved by DOJ.  The MVF has published the Plan of 

Distribution on its website in the form of answers to frequently asked questions since 

November 2013. 

18. The Plan of Distribution and Regulations provide, among other things, that only 

victims of the Madoff Fraud are eligible to receive remission payments from the MVF, 

meaning that claimants must have lost their own money through the Madoff Fraud.  

Specifically, the Plan of Distribution states: 

a. To be eligible to participate in payments from the MVF, a person must be a 
“victim” of the fraud perpetrated through Madoff Securities. Any person who is not a 
victim of the Madoff fraud is not eligible to receive a payment of remission. 
 

b. Federal law defines a “victim” as “any person” who suffered a “pecuniary 
loss” as a “direct result” of crime. For purposes of the MVF, you qualify as a victim if 
you lost your own money as a direct result of investments that were rendered worthless 
by the Madoff fraud. 
 

19. The Plan of Distribution further states: “A victim is the person or entity that 

suffered a pecuniary loss as a direct result of the criminality that gave rise to the forfeiture 



 

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of assets in this case. That status cannot be purchased or transferred; indeed, the forfeiture 

laws and regulations forbid it. You are either a victim or you are not.”  The Regulations 

similarly provide that purchasers of remission rights are not eligible victims.  See 28 C.F.R. 

§ 9.2 (a victim for purposes of remission is “a person who has incurred a pecuniary loss as a 

direct result of the commission of the offense underlying a forfeiture” and generally “does 

not include one who acquires a right to sue the perpetrator of the criminal offense for any 

loss by assignment, subrogation, inheritance, or otherwise from the actual victim”). 

20. The Plan of Distribution and Regulations further provide that victims may recover 

only their pro rata share of the net losses they incurred as a result of the Madoff Fraud, 

calculated on a cash-in, cash-out basis, and that any collateral recoveries the victim has 

received from any source other than the MVF must be deducted from the net loss amount.  

Specifically, the Plan of Distribution states: 

a. It is your responsibility to establish to the satisfaction of the Ruling Official 
within the Department that you suffered a specific, net loss. 
 

b. There is a limited amount of money to compensate an enormous group of 
victims, some of whom have not yet received a penny. So, no double dipping will be 
allowed, and no one is eligible to recover more than his or her actual “net loss” on a cash-
in, cash-out basis.  
 

c. The starting point in measuring your loss is all the cash you invested in 
Madoff Securities, less any cash you received back. This establishes the cash that was 
taken from you, less your recoveries during the years of the fraud. 
 

d. Once your original “net loss” is known, the Department’s regulations require 
all “collateral recoveries” you have already received, or that you will receive in the future, 
to be deducted from a claim for remission.  
 
21. The Regulations generally require remission to be granted  “on a pro rata basis … 

when petitions cannot be granted in full due to the limited value of the forfeited property,” 

28 C.F.R. § 9.8(f), and prohibit remission where the victim already has been “compensated 

for the wrongful loss” or has “recourse reasonably available to other assets from which to 



 

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obtain compensation for the wrongful loss,” id. §§ 9.8(b)(4), 9.2(b)(5).  The Regulations 

further require any victim receiving remission payments to reimburse the United States “to 

the extent the individual later receives compensation for the loss … from any other source.”  

Id. § 9.8(g). 

22. The Plan of Distribution defines “collateral recoveries” broadly to cover any 

compensation a victim may receive from any source.  Specifically, the Plan provides: 

a. Collateral recoveries include any payments you received from the [Securities 
Investors Protection Corporation], all bankruptcy distributions (directly or through an 
intermediary) on all accounts you held, insurance or class action recoveries, or any other 
form of compensation you have received. You will have to certify under penalties of 
perjury the completeness and the accuracy of the disclosure of your recoveries to date.  
 
23. The MVF has issued Collateral Recovery Update (“CRU”) Notices to all eligible 

claimants in advance of each of its distributions.  Completion of the CRU form attached to 

the Notice or other updated collateral recovery disclosure is a condition precedent for being 

considered for a MVF distribution.  The CRU  Notices make clear that all collateral 

recoveries must be disclosed and that collateral recoveries include compensation from any 

source, including proceeds from the sale of claims for Madoff recoveries.  For example, the 

CRU Notices provide the following: 

a. [I]f you HAVE received payment relating to your Madoff losses from your 
investment fund, from class action litigation, from bankruptcy distributions, from the sale 
of your claim, or from any other source, then you must update us on your recoveries.   
 

b. The reason MVF needs this information is simple. Federal law prohibits MVF 
from paying anyone more than their actual losses. In addition, the amount of your next 
payment will be a specific percentage of your eligible Madoff fraud loss LESS all prior 
recoveries. Without knowing your prior recoveries, we can’t determine how much you 
should be paid. 
 

c. As with all prior MVF payouts, in order to be eligible for a payment you must 
complete a collateral recovery update.  If you are eligible for a … payment, the amount of 
your payment will be the distribution target recovery percentage of your approved fraud 
loss amount, less all prior recoveries from any source and previous MVF distributions.  
Therefore, MVF must ask you to update information on your total recoveries in order to 
calculate your potential payment.  



 

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24. From 2013 through the present, the MVF posted multiple notices on its website 

providing further clarification on what constitutes a collateral recovery and further 

explaining the importance of disclosing collateral recoveries to permit the MVF to properly 

calculate remission payments.  For example: 

a. August-December 2017 Update:  MVF previously sent you a collateral 
recovery update request explaining that: “Collateral recoveries include bankruptcy 
distributions, litigation recoveries, settlement proceeds, insurance recoveries, or any other 
compensation received for your Madoff losses.” Essentially, anything you received from 
anyone due to your Madoff loss is a collateral recovery. In particular, you need to report 
to MVF all payouts from the Madoff bankruptcy, as well as any proceeds you received as 
a result of the sale or assignment of your claim in either the bankruptcy or MVF 
proceedings.  
 

b. Spring 2018 Update:  MVF calculates individual victim payments based on 
what amount is required to bring an individual victim to a total percentage recovery of 
their eligible fraud loss, including all prior recoveries from other sources (sometimes 
called “collateral recoveries”). We describe that payout percentage… as the baseline 
recovery percentage, and it is likely to go up with each MVF distribution. Because the 
amount of recoveries from all sources received by a victim is part of the payment 
computation, every victim has been asked to provide periodic updates on their own 
recoveries from sources other than MVF.  Absent disclosure of outside recoveries, some 
investors would be paid more than the recovery percentage being paid to everyone else. 
 

FACTUAL ALLEGATIONS 
 

Fulcrum Engaged in a Scheme to Fraudulently Obtain  
Inflated Remission Payments From the MVF 

 
25. From at least October 2016 through October 2022, Fulcrum violated the FCA by 

fraudulently obtaining, as a non-victim of the Madoff Fraud, remission payments from the 

MVF to which it was not entitled.  Specifically, Fulcrum purchased recovery rights from 

various Madoff Fraud victims who had submitted remission claims to the MVF and 

compelled them to transfer any remission payments they received from the MVF to 

Fulcrum.   

26. Fulcrum also fraudulently compelled the claimants whose Madoff recovery rights it 

had purchased to submit false disclosures to the MVF, concealing the amounts Fulcrum 



 

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paid for those recovery rights.   As explained above, to prevent MVF claimants from 

receiving duplicative recoveries, the Regulations and MVF Plan of Distribution require (i) 

MVF claimants to report all collateral recoveries received, including proceeds from the sale 

of any Madoff recovery rights or MVF claims, and (ii) the MVF to reduce remission 

payments by the amount of such  collateral recoveries.  Compliance with these 

requirements would have resulted in Fulcrum obtaining substantially smaller remission 

payments from the MVF.  Therefore, as a result of Fulcrum’s fraudulent concealment of 

these collateral recoveries, the MVF made inflated remission payments to the victims, 

which they in turn paid over to Fulcrum. 

A.  Fulcrum Purchased Madoff Recovery Rights From MVF Claimants 

27. Through a number of transactions during 2014-2019, Fulcrum purchased Madoff 

claims and MVF recovery rights from multiple victims of the Madoff Fraud. 

28. Luxalpha SICAV (“Luxalpha”) was a Luxembourg-based investment fund that 

operated as a Madoff Securities feeder fund, and its underlying investors suffered losses as 

a result of the Madoff Fraud.   

29. Among the persons and entities who were beneficial owners of Luxalpha shares 

were:  (i) Carac, a public pension fund based in Paris, France; (ii) a group of investors in a 

fund called “Fondaco Absolute Return,” which was managed by Fondaco SGR S.p.A. 

(“Fondaco”), an institutional asset management company based in Torino, Italy (the 

“Fondaco Investors”), including Compagnia di San Paolo (“CSP”), a foundation based in 

Torino, Italy; and  (iii) a group of individuals located in France, named Bruno Plancke, 

Michel Plancke, Olivier Plancke, Thierry Plancke, and Virginie Reant Plancke (the 

“Planckes”). 



 

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30. In February, March and April 2014, Carac, the Fondaco Investors, and the Planckes 

(the “Claimants”) each filed claims with the MVF seeking remission payments for losses 

they claimed to have incurred as a result of their investments in Madoff Securities through 

Luxalpha.  

31. Fulcrum subsequently purchased the Claimants’ Luxalpha shares and attendant 

rights and MVF claims.  Specifically, Fulcrum purchased Fondaco’s Luxalpha shares in 

July 2014, Carac’s Luxalpha shares in October 2014, and the Planckes’ Luxalpha shares in 

January 2019.  Fulcrum immediately resold the Fondaco and Carac shares to third parties, 

but purported to retain rights to most of the Claimants’ MVF remission payments.  In 

particular, Fulcrum entered into Purchase and Sale Agreements (“PSAs”) with Carac, CSP, 

and the Planckes pursuant to which Fulcrum purported to acquire their rights to receive 

remission payments from the MVF.    

32. Fulcrum knew that, pursuant to the Regulations and the Plan of Distribution, 

Fulcrum was not eligible to receive remission payments directly from the MVF because 

Fulcrum was not a Madoff Fraud victim and had merely purchased the Claimants’ 

Luxalpha shares and attendant rights and MVF remission claims.  Accordingly, as part of 

the PSAs, Fulcrum required Carac, CSP, and the Planckes to transfer any amounts they 

received from the MVF to Fulcrum.  Specifically, as part of the PSAs, Carac, CSP, and the 

Planckes agreed that they would retain no beneficial interest in any distributions they 

received from the MVF, that they would hold any such distributions as agents of Fulcrum, 

and that they would deliver any such distributions to Fulcrum within five days of receipt.   

B.  Fulcrum Fraudulently Directed the Claimants to Submit False Claims or 
      Statements to the MVF in Order to Obtain Inflated Remission Payments 
 
33. Fulcrum knew that, pursuant to the Regulations and Plan of Distribution, the 

Claimants were required to report to the MVF all collateral recoveries they received, 



 

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including proceeds from the sale of their Luxalpha shares and MVF remission claims, and 

that the MVF would reduce any remission payments to the Claimants by the amount of the 

collateral recoveries they reported.   

34. For example, in internal emails in or about August 2017, Fulcrum representatives 

circulated and discussed the MVF’s August-December 2017 Update reiterating that 

collateral recoveries, which reduce remission payments, include “any proceeds [claimants] 

received as a result of the sale or assignment of [their] claim in either the bankruptcy or 

MVF proceedings.”   

35. To ensure that the MVF would not reduce the Claimants’ remission payments by 

the amounts Fulcrum had paid the Claimants for their Luxalpha shares and attendant rights 

and MVF remission claims, Fulcrum acquired the right to control Carac’s, CSP’s, and the 

Planckes’ communications with the MVF and fraudulently required them to conceal this 

collateral recovery information from the MVF. 

36. Specifically, under the PSAs, Carac, CSP, and the Planckes granted Fulcrum 

irrevocable power of attorney with respect to the remission claims and authorized Fulcrum 

to act in each of their names, places, and steads with respect to those claims.  Further, 

Carac, CSP, and the Planckes agreed to deliver all correspondence they received from the 

MVF to Fulcrum and take all actions requested by Fulcrum to effectuate the terms of the 

PSAs. 

37. From October 2016 through October 2022, the MVF sent multiple CRU Notices to 

the Claimants requesting that they identify all compensation received from any source 

other than the MVF, including proceeds from the sale of Madoff claims.  Pursuant to the 

PSAs, Fulcrum received Claimants’ copies of the CRU Notices, and fraudulently instructed 

or otherwise caused the Claimants to submit false CRU responses to the MVF that failed 



 

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fully to disclose the amounts the Claimants had received from selling their Luxalpha shares 

and related rights and remission claims to Fulcrum.      

38. For example, in September 2017 and May 2019 pursuant to the PSA and at 

Fulcrum’s behest, Carac submitted two CRU responses to the MVF that falsely represented 

that Carac had received no collateral recoveries, when in fact it had received significant 

sales proceeds from Fulcrum.  

39. Similarly, from February 2017 through July 2019, pursuant to the PSA and at 

Fulcrum’s behest, CSP submitted four CRU responses to the MVF that falsely failed to 

disclose the full amount that CSP had received from Fulcrum for its Luxalpha shares and 

related rights.  CSP stated that it had sold its remission claim to an unidentified secondary 

market player for a specified amount, but this amount reflected only the smaller amount 

CSP received from Fulcrum for the purported sale of its remission rights, rather than the 

total proceeds CSP received from Fulcrum for the sale of its Luxalpha shares and related 

rights.   

40. In or about August 2017, representatives of CSP encouraged Fulcrum to reach out 

to the MVF to confirm whether the sales proceeds Fulcrum had received constituted 

collateral recoveries, but Fulcrum refused to do so, and instead insisted that CSP submit 

false disclosures to the MVF concealing the Fondaco Investors’ sale of their Luxalpha 

shares and attendant rights to Fulcrum. 

41. From February 2017 through July 2019, the Fondaco Investors other than CSP 

likewise submitted twenty-eight CRU responses to the MVF that falsely represented that 

these investors had received no collateral recoveries, when in fact they had received 

significant sales proceeds from Fulcrum.  



 

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42. From August 2019 through October 2020, pursuant to the PSA, and at Fulcrum’s 

behest, the Planckes submitted twenty CRU responses to the MVF that falsely represented 

that the Planckes had received no collateral recoveries other than those they received from 

a financial intermediary in connection with a litigation settlement, when in fact they had 

received significant additional proceeds from Fulcrum for the sale of their Luxalpha shares 

and attendant rights and MVF remission claims.   

43. Fulcrum knew that the aforementioned CRU responses that the Claimants submitted 

to the MVF were false.  

44. Fulcrum’s misrepresentations concerning collateral recoveries were material to the 

MVF’s and DOJ’s remission payment decisions.  As noted above, prior to each MVF 

distribution, MVF claimants have been required to certify under penalty of perjury to the 

truthfulness and accuracy of their CRU responses as a condition precedent to receiving a 

remission payment.  Had Fulcrum disclosed, or caused the Claimants to disclose, the 

amounts the Claimants had received from Fulcrum for the sale of their Luxalpha shares and 

attendant rights and MVF remission claims, the MVF would have reduced the Claimants’ 

respective remission payments by the amount of those sales proceeds. 

45.  As a result of Fulcrum instructing or otherwise causing the Claimants to submit 

false collateral recovery information as described above, the MVF distributed remission 

payments to the Claimants that they were not entitled to receive.  Pursuant to the PSAs, 

Carac, CSP, and the Planckes then transferred the amounts they had improperly received 

from the MVF to Fulcrum. 

 

 

 



 

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CLAIMS FOR RELIEF 

FIRST CLAIM 

Violations of the False Claims Act: Presenting False Claims for Payment 
31 U.S.C. § 3729(a)(1)(A) 

 
46. The Government incorporates by reference paragraphs 1 through 45 above as if 

fully set forth in this paragraph. 

47. The Government asserts claims against Fulcrum under 31 U.S.C. § 3729(a)(1)(A). 

48. Fulcrum knowingly, or acting with deliberate ignorance or reckless disregard for 

the truth, presented, or caused to be presented, false or fraudulent claims for payment or 

approval to the MVF in violation of 31 U.S.C. § 3729(a)(1)(A).  Specifically, Fulcrum 

fraudulently instructed or otherwise caused the Claimants to submit false claims to the 

MVF that failed to identify collateral recoveries the Claimants had received from Fulcrum 

for the sale of their Luxalpha shares and attendant rights and remission claims to the MVF. 

49. As a result of these false or fraudulent claims, the MVF made inflated remission 

payments to the Claimants to which they were not entitled.  Carac, CSP, and the Planckes 

then transferred these amounts they had unlawfully received from the MVF to Fulcrum. 

50. By reason of the false or fraudulent claims or statements that Fulcrum knowingly 

presented, or caused to be presented, for payment or approval, the Government has been 

damaged in a substantial amount to be determined at trial, and is entitled to recover treble 

damages plus a civil monetary penalty for each false claim. 

SECOND CLAIM 
  

Violations of the False Claims Act: Use of False Statements 
31 U.S.C. § 3729(a)(1)(B) 

 
51. The Government incorporates by reference paragraphs 1 through 50 above as if 

fully set forth in this paragraph. 



 

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52. The Government asserts claims against Fulcrum under 31 U.S.C. § 3729(a)(1)(B). 

53. Fulcrum knowingly, or acting with deliberate ignorance or reckless disregard for 

the truth, made, used, or caused to be made or used, false records or statements that were 

material to false or fraudulent claims for payment submitted to the MVF.  Specifically, 

Fulcrum fraudulently instructed or otherwise caused the Claimants to submit false 

disclosures to the MVF that concealed collateral recoveries the Claimants had received 

from Fulcrum for the sale of their Luxalpha shares and attendant rights and  remission 

claims to the MVF. 

54. As a result of these false or fraudulent disclosures, the MVF made inflated 

remission payments to the Claimants to which they were not entitled.  Carac, CSP, and the 

Planckes then transferred these amounts they had unlawfully received from the MVF to 

Fulcrum. 

55. By reason of these false records or statements, the Government has been damaged 

in a substantial amount to be determined at trial and is entitled to recover treble damages 

plus a civil monetary penalty for each false record or statement. 

PRAYER FOR RELIEF 

 WHEREFORE, plaintiff, the Government, requests that judgment be entered in its 

favor as follows: 

1. On the First and Second Claims for relief (violations of the FCA, 31 U.S.C. §§ 

3729(a)(1)(A) and 3729(a)(1)(B)), a judgment against Fulcrum for treble the 

Government’s damages, in an amount to be determined at trial, plus a civil penalty in the 

maximum applicable amount for each violation of the FCA by Fulcrum; 

2. An award of costs incurred by the Government pursuant to 31 U.S.C. § 

3729(a)(3); and  



 

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3. Such further relief as is proper. 

Dated: New York, New York 
 September __, 2023 
      DAMIAN WILLIAMS 

United States Attorney for the 
Southern District of New York 
       

     By:  /s/  Pierre G. Armand   
PIERRE G. ARMAND 
Assistant United States Attorney 
United States Attorney’s Office 
86 Chambers Street, 3rd Floor 
New York, NY 10007 
Tel: (212) 637-2724 
Email:  [email protected] 
Attorney for the United States of America